Policies and Strategies for Poverty Reduction in Norwegian Development Aid

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Policies and Strategies for Poverty Reduction

in Norwegian Development Aid

A Review

Arve Ofstad and Elling N. Tjønneland

A report submitted to the Royal Norwegian Ministry of Foreign Affairs by the Chr. Michelsen Institute

The Ministry does not accept any responsibility for the information in this report nor the views expressed, which are solely those of the Chr. Michelsen Institute

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Acronyms and abbreviations

BIDS Bangladesh Institute of Development Studies

CGIAR Consultative Group on International Agricultural Research DAC Development Assistance Committee of the OECD

ERP Economic Recovery Programme FAO Food and Agricultural Organisation GEF Global Environmental Facility GNI Gross National Income GNP Gross National Product

IBRD International Bank of Reconstruction and Development IDA International Development Agency

IMF International Monetary Fund

IRDP Integrated Rural Development Programme IRWP Intensive Rural Works Programme (Bangladesh) LCG Local Consultative Group

LMC Like-Minded Countries

MFA Ministry of Foreign Affairs MoU Memorandum of Understanding NGO Non-governmental Organisation

NOK Norwegian Kroner

NORAD Norwegian Agency for Development Cooperation

NOU Norges Offentlige Utredninger (Official Norwegian Report) NVS Norwegian Volunteer Service

ODI Overseas Development Institute (London)

OECD Organisation for Economic Co-operation and Development PEDP Primary Education Development Programme (Bangladesh)

PRIDE Promotion of Rural Initiatives and Development Enterprises (Tanzania) RESP Rural Employment Sector Programme (formerly the IRWP)

SAP Structural Adjustment Programme

SEDP Small Enterprise Development Project (Bangladesh) SDA Social Dimensions of Adjustment

SPA Special Programme of Assistance for Africa UNDP United Nations Development Programme UNFPA United Nations Fund for Population Activities UNHCR United Nations High Commissioner for Refugees

WFP World Food Programme

WHO World Health Organisation

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FOREWORD 7

Foreword

This report provides an overview of policies and strategies for poverty reduction in Norwegian development aid. It is fully recognised, however, that “poverty reduction” represents a large issue which depends on a number of social, economic, political and cultural conditions, and that requires a broad set of policy interventions by national authorities, well beyond the impact of development aid. While poverty has been reduced in a number of countries over the last decades, it has also proven extremely resilient even in middle and high-income countries.

The first part examines Norway’s poverty reduction goals, conceptions and approaches, as reflected in policy documents and by aid policy officials. The second part discusses the management of Norwegian development assistance for poverty reduction, especially related to “mainstreaming” and operationalisation.

The final part offers a review of how Norway interprets and implements its overall poverty reduction objective in two of Norway’s long-standing priority countries, Bangladesh and Tanzania.

The report studies the Ministry of Foreign Affairs (MFA) and NORAD. MFA has the overall responsibility for foreign policy, including aid-related relations between Norway and developing countries and between Norway and international organisations. The Ministry handles directly all aid through multilateral organisations, as well as all humanitarian assistance.

The Norwegian Agency for Development Cooperation (NORAD) is subordinate to the Ministry of Foreign Affairs and the executive body of Norway’s bilateral development co-operation. “Norway” in this report refers to both these institutions.

This study has been formally commissioned by the Policy Planning and Evaluation Staff in the Norwegian Ministry of Foreign Affairs. The report is based on a paper first submitted in November 1998 to the Over- seas Development Institute (ODI) in London. ODI co- ordinates a major study for the Poverty Reduction Net- work of OECD’s Development Assistance Committee (DAC). This informal network of donor agencies concerned with poverty reduction commissioned ODI to put together an overview of how donors approach and view poverty reduction; how they manage and operationalise poverty reduction goals; and how they moni- tor and evaluate it.

ODI commissioned a review of each of the DAC member countries as well as of major multilateral agencies.

Each of these reviews were compiled and written based on guidelines provided in a Case Study Hand- book. They were discussed at a workshop in London in December 1998. A synthesis report will be prepared and submitted to DAC in February/March 1999. The report will provide recommendations for further actions by DAC in assisting members in their development of policies and strategies for poverty reduction in development assistance.

The preparation of the current report has benefited from discussion at the London workshop, and from numerous comments received from colleagues at CMI, and from the Ministry of Foreign Affairs and NORAD.

A previous draft was presented at seminars in January 1999 in the Ministry as well as in NORAD. We are especially pleased to have received comments also from the Minister of International Development and Human Rights. The authors nevertheless remain responsible for flaws and omissions, and for the views expressed.

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Executive summary

This paper provides an overview of Norwegian policies and strategies for poverty reduction. It assesses Norway’s development aid policy in light of the renewed international donor emphasis on poverty and the ambition of assisting in reducing the number of people living in extreme poverty by 50% by the year 2015.

Poverty reduction has remained an overarching goal for Norwegian aid, but this goal has been modified by a number of other development objectives such as the promotion of human rights and democracy, good governance and institution building, gender and environmental concerns. Norwegian policy documents argue that the pursuance of these and other objectives will (most often) have an either direct or indirect positive impact on poverty reduction. One might, however, as well argue that poverty reduction is now one out of five overarching objectives.

Norway may have no specific and articulated strategy for poverty reduction in its development aid, but this report argues that Norway nevertheless has an underly- ing model or approach. There is a fairly broad consensus that multi-pronged interventions are required; that the role of the state and public policy is crucial; and that framework and enabling conditions are critical for poverty reduction.

It should be fully realised, however, that poverty reduction is a large issue, which requires a broad set of policy interventions by national authorities, far beyond the impact of development aid.

The specific Norwegian policies and strategies have changed over time, but support to the poorest countries, social sectors and rural development in a few prioritised countries have remained fairly constant features. At times, particular during the “basic needs”

period in the late 1970s and 1980s, more emphasis has been placed on targeted interventions to reach poor communities and/or poor geographical regions. In recent years, the Norwegian emphasis has been on

“recipient responsibility” and local “ownership” and with a focus on institutional development and donor co-ordination as important instruments. There has also been an increasing emphasis in the latter half of the 1990s on spending on social sectors and with a priority to provision of basic social services, which is assumed to have a stronger direct impact on poverty reduction.

This report summarises nine main policy elements in the Norwegian approach to poverty reduction, and

concludes that Norway has adopted a basic social democratic model in its approach, modified by a Christian/social liberal model for direct targeting, and influenced by feminist and NGO activist approaches.

Promotion of poverty reduction through multilateral institutions has become particular important for Nor- way in the past decade. Norway has allocated financial aid to UN agencies that are considered to have a poverty focus, and to the development banks, and has made efforts to assist these institutions to become even more poverty focused in their operations. In recent years Norway has had a strong profile in following up the 20/20 initiative and in calling for increased allocations to basic social services.

However, this report argues that the poverty reduction policies and strategies in Norwegian development aid may benefit from a further sharpening and that lessons may be learned from the current international policy debates.

Poverty reduction strategies will have to move beyond increasing allocations to social services or to the poorest countries. A main challenge is how to promote poverty reduction within other areas; in the support to sectors such as economic activities, infrastructure and public sector management, or within the framework of policy dialogues and donor co-ordination.

Any efforts to introduce a more focused poverty reduction profile poses a number of challenges for Norwe- gian development aid. This relates to the often difficult dilemmas and trade-offs which any aid agency pursuing a multiplicity of objectives are faced with. They are reinforced through the policy dialogue with aid recipients, and especially with a commitment to donor co-ordination and recipient ownership.

The report identifies several issues which must be addressed if poverty reduction are to be further sharp- ened and mainstreamed in Norway’s development aid.

This includes operational guidelines for improved poverty focus in all sectors and interventions;

increased poverty awareness among staff; assistance to operational personnel in improving planning and implementation of poverty reduction interventions;

and more attention to monitoring of poverty reduction performance and the effectiveness of interventions. A strong message and commitment from the top management and political leaders are important to encourage and develop skills and attitudes throughout the organisation.

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EXECUTIVE SUMMARY 9

The report underlines the need to strengthen the poverty analysis, awareness and policy making at the country level, as much as in the headquarters in Oslo.

The final part of this report reviews how Norway’s interprets and operationalises its overall development objective of poverty reduction in Bangladesh and Tan- zania. The approach towards poverty issue in these two countries is very different, even though there are parallel features. In both countries Norway practices its policy of promoting greater recipient responsibility.

This includes efforts to strengthen institutions playing an important role in contributing to poverty reduction.

In Tanzania the main and overall emphasis is on eco-

nomic recovery and institutional improvement, while in Bangladesh the overall emphasis is on enabling their national institutions to provide basic services.

In both countries Norway also supports non-governmental organisations which are involved in empower- ing weak and underprivileged groups.

The productive sectors seem to be the most problem- atic sector in both countries in terms of contributing to poverty reduction. It has not been easy to identify ways and means to promote “pro-poor” economic growth and production.

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1: Norway’s poverty reduction goals, conceptions and approaches

There has been a growing commitment to poverty reduction in international policy statements on official development assistance over the past few years. Fol- lowing the 1995 Social Summit, the Development Assistance Committee of the OECD has committed itself to assist in reducing the number of people living in extreme poverty by 50 % by the year 2015.¹ Most development aid donors and agencies have adopted this goal. The great majority has made “poverty reduction” either an overarching goal, or a priority goal alongside other goals. The World Bank has shaped much of this policy and strategy debate, especially related to poverty reduction policies in Sub-Saharan Africa, following its 1990 World Development Report and subsequent reports and studies. UNDP has equally made poverty reduction through a sustainable human development its primary focus, and produces the annual Human Development Reports.

The new concern with poverty should not, however, lead us to conclude that poverty reduction is a new theme in official development assistance. Poverty reduction has always been a central objective for aid, and in many agencies it has a long tradition as a formal priority goal. The emphasis on “basic needs” emerging in the late 1970s is an example of a strong poverty concern in an earlier period. The continuity with previous aid policies is often forgotten in the current debate.

The current focus is also sometimes pure rhetorical with politicians and aid officials jumping on a new catchword to justify traditional aid policies and strategies.

The Norwegian emphasis on poverty and poverty reduction in the South has at one level remained fairly constant throughout the last 30-40 years. Reduction of poverty has always been seen as an overarching goal and raison d’être for official development assistance.

Meanwhile, other development objectives have been formulated, such as general economic development and nation-building, promoting women and gender equity, better protection of the environment and management of natural resources, and more recently promoting democracy, human rights and peaceful settlement of conflicts. As we will discuss below, these objectives are promoted as ends by themselves, but they have also – at least partially or indirectly – been

seen as contributing to the overall objective of poverty reduction.

However, Norway has never had any clearly articulated operational approach to this overall objective.

Rather, it has pursued poverty reduction through a number of more specific objectives and operational guidelines, which – it is assumed – will contribute to poverty reduction. These approaches and specific policies have changed over the years, but support to social sectors and rural development in a few prioritised countries selected among the group of least developed countries have remained fairly constant features. At times, emphasis was also placed on more targeted interventions to reach poor communities and/or poor geographical regions within poor countries. This was the case particular during the heydays of ”basic needs”

and the first wave of support for non-governmental organisations in the late 1970s and 1980s, when there was a widespread critique of economic growth models as well as lack of confidence in Government institutions. During the 1990s the Norwegian approach has again tended to emphasise a systemic approach to poverty reduction with a focus on recipient commitment to poverty reduction and development. In recent years this has led to a particular strong emphasis on Govern- ment policies, ”recipient responsibility” and ”ownership”, and a focus on institutional development as the best way of pursuing overall goals and objectives.

It must also be emphasised that the ”multilateral channel” has remained a particular important avenue for promoting Norwegian development aid objectives.

This is based on Norway’s position in international politics. As a small country, Norway’s general policy is to strengthen the multilateral system. It seeks to play an active role in governing bodies of many institutions, and it uses earmarked funding to pursue a number of priority issues. Currently about 44 per cent of all Nor- wegian development aid (including emergency aid and bilateral aid administered by multilateral organisations) is channelled through multilateral institutions.

We shall see below that poverty reduction and social issues have been particular important areas for Norwe- gian policy related to the multilateral development aid system.

1. The DAC Statement aims at reducing extreme poverty, but refers to the World Bank assessment of some 1.3 billion people below the “1$ a day” benchmark, and not to the most extreme poverty at consumption levels below $275 per capita a year, estimated at around 630 million persons. This distinction does have implications for policy.

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1: NORWAY’S POVERTY REDUCTION GOALS, CONCEPTIONS AND APPROACHES 11

1.1 The role of poverty reduction in overall policy goals, aims and objectives

The development of aid policies has been formulated in special Reports to the Parliament (Stortings- meldinger)², the annual report on development aid activities, in the annual budget proposal presented to Parliament in October, and in key speeches by development aid ministers.

Most recently, the newly appointed Minister of Inter- national Development and Human Rights has given a renewed emphasis on poverty reduction. In her first major Statement to Parliament (the Storting) on devel- opment cooperation policy in May 1998 she said that:

“We must organize the whole of our development policy in such a way that it actually does benefit the poorest people and the poorest countries. We must not just say it. We must not just want to do it.

We must do it. (...) The poverty criterion will be made a major consideration in the choice of countries, sectors, target groups and channels for assistance.”³

As her predecessors, however, the present Minister also underlines other parallel objectives for Norway’s aid programme, as discussed below. Norway has nevertheless committed itself to the OECD/DAC goal of assisting in achieving a reduction by fifty percent of those living in extreme poverty by the year 2015.

The specific development aims and objectives have varied over the years, also in terms of how to contribute to poverty reduction. In 1962 it was simply stated that the objective was to promote economic, social and cultural development. 10 years later the Report No. 29 (1971-72) added income distribution, and strongly emphasised that aid should be allocated to countries that promoted economic and social development. This Report, complemented by Report No.94 (1974-75) which primarily discussed the broader economic relations, trade and New International Economic Order issues, remained the main reference document for Norwegian aid policies for almost 15 years. It is safe to say that the overall aid policies during this period were aiming at a combination of a welfare and economic growth with equity strategy, coupled with general support to nation building – with poverty reduction as the long-term objective.⁴

In the early 1980s, however, the policy environment was changing. The 1984 policy (Report No. 36 – 1984- 85) which was prepared by a Centre-Right coalition government, emphasised that development assistance should maximise development efforts for the ”poor sections” of the people and focus on a more targeted basic needs approach. It gave strong support to the role of non-governmental organisations. It also gave a greater opening for support to Norwegian commercial trade and investments in the developing world. This Report introduced a stronger emphasis on promotion of human rights, and confirmed the growing concern about women in development (mentioned already in Report No. 94) and environmental issues.

The next policy report (Report No. 34 – 1986-87) which was prepared by a Labour government as a supplement to the previous Report No.36, also adheres to the principle of basic needs as a way of reducing poverty, but places greater emphasis on macro-economic issues and the promotion of economic growth. At the same time it further reiterates the “new” issues as development objectives, in particular women in development and the environment, and lists five goals as particularly important:

• Responsible management of natural resources and the environment

• Economic growth

• Improved living conditions for the poorest population groups

• Safeguarding of human rights, and

• Promotion of peace between countries and regions

Only one out of five important goals is aiming directly at poverty reduction. Finding the balance and the inter- linkages between these five goals remains an important issue at the overall policy level as well as in the practical implementation of development programmes.

Report No .51 (1991-92) was prepared after the release of the World Bank’s influential three-pronged approach to poverty reduction based on broad-based growth, development of human resources, and social safety nets. The Norwegian report does re-emphasise that Norway’s aid shall be primarily directed towards the poorest countries, and especially to the poorest sections within those countries. It reiterates that development assistance shall be used in such a way that “it

2. Since 1972 a total of six such reports have been presented by the government to the Norwegian Parliament (Storting), the most recent being Report No.19 (1995-96).

3. Minister of International Development and Human Rights Hilde Frafjord Johnson: “Statement to the Storting on development cooperation policy” 5 May 1998. (Official translation)

4. Olav Stokke has written extensively on Norway’s aid policies and principles; see inter alia his article “The Determinants of Norwegian Aid Policy” in O.Stokke (ed) Western Middle Pow- ers and Global Poverty. Uppsala: The Scandinavian Institute of African Studies, 1989 (pp.159-229) and his article “Mål, strategi og prinsipper for norsk bistand: Old bottles?” in O.Stokke (ed.) Norsk nord-sør politikk: lever den opp til sitt rykte?. Oslo: Norwegian Institute for International Affairs (Research report no.163)

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leads to the greatest improvements for the poor section of the population (and) the poorest developing countries shall be given priority”. The importance of domestic policies to reduce poverty is emphasised, and the principle of recipient-orientation is strongly articulated. The emphasis shall be on strengthening the economy of the developing countries and on improving their administrative, social and economic infrastructure. In addition this policy document strongly argues for a need to target efforts towards basic needs, strengthening sectors such as food production, health, education and employment, in order to ensure that development benefits the broad majority of the population.

However, this Report gave equally strong emphasis to the concept of sustainable development, coming in the wake of the “Brundtland Report”⁵ and just prior to the Rio Summit on environment and development in 1992.

Many saw it as signalling a shift towards much stronger concentration on the environmental dimension.

The Report nevertheless underlines a continuation of previous overall policy goals, and confirms the five central development objectives from the previous Report.

Report No.19 (1995-96) is the most recent comprehen- sive policy document on development aid presented to Parliament. It followed the submission of the report from the Government-appointed independent Com- mission on North-South and Aid Policies⁶. The Com- mission argued that poverty reduction in the South depended on a combination of a developmental state and an active civil society, a strong economic basis, human resources in terms of good health, education and nutrition, a responsible management of natural resources, a capacity for finding peaceful solutions to conflicts, and an enabling international framework.

The Government’s Report reaffirms the previous governments’ policies and principles, but argues more strongly for a focus on the internal framework conditions in developing countries which create or contribute towards maintaining poverty. Reducing poverty is seen as conditional upon both economic growth and social development and Norwegian aid shall therefore aim at promoting basic social services as well as private sector development. The Report underlines the importance of economic growth in the recipient coun-

try, but it also says that growth does not automatically lead to reduced poverty for weak groups. This will require more equitable distribution of employment and incomes between the various population groups. The development of a social safety net for the most vulnerable groups is mentioned as important in laying the foundations of practical policy. Norway will, according to this document, make efforts to promote this type of social distribution development through dialogue with authorities and an active policy towards the multilateral agencies, particularly the World Bank and the IMF.

Support to reduction of population growth, private sector development, economic reform programmes and debt relief for the poorest countries are considered to be basic premises for poverty reduction. Furthermore, this Report highlights the situation of particularly vulnerable groups such as children and the disabled. A specific connection is made with the fight against child labour, which is seen not just as promotion of human rights but also as linked to combating poverty.

Report No.19 was nevertheless seen by the opposition in Parliament and by many development activists as giving too strong emphasis on economic growth and in particular on efforts to promote Norwegian commercial interests, at the cost of support to the social sectors and a poverty focus. The Government claimed, however, that these objectives were mutually reinforcing.

The majority in Parliament underlined that:

“The overarching objective for Norwegian development aid is to contribute to lasting improvements in the economic, social and political conditions for the population in developing countries, with special emphasis that the assistance should benefit the poorest”.⁷ (Unofficial translation)

The majority in Parliament agreed with the Govern- ment and the Commission on North-South and Aid Policies that development aid has to be fully integrated within the overall “South policies” which includes international economy, trade and debt, as well as environment issues, democracy, human rights and peace. It then concluded that the five main goals for Norway’s South policies should be reformulated:

• To combat poverty and contribute to lasting improvements in living conditions and quality of life, and thus promote greater social and economic development and justice nationally, region- ally and globally

• To contribute to promotion of peace, democracy and human rights

5. World Commission on Environment and Development. Our Common Future. New York/ Oxford: Oxford University Press, 1987.

6. Nord-Sør/Bistandskommisjonen. Norsk sør-politikk for en ver- den i endring. Oslo: Norges Offentlige Utredninger (NOU 1995:5) Partially translated into English as: Norwegian South Policy for a Changing World. Oslo: Official Norwegian Report 1995:5 (Report submitted to the Ministry of Foreign Affairs)

7. Innst.S.nr.229 (1995-96) Innstilling fra utenrikskomiteen om hovedtrekk i norsk politikk overfor utviklingslandene. Oslo:

Stortinget, 3 June 1996.

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• To promote a responsible management and exploitation of the global environment and biolog- ical diversity

• To contribute to prevention and mitigation of human suffering related to conflict situations and natural disasters

• To contribute to promotion of equal rights and opportunities for men and women in all spheres of society⁸ (Unofficial translation)

Report No.19 and the following parliamentary debate in 1996 thus reiterated that poverty reduction is a major objective not only for development aid, but also for Norway’s overall South policies. However, poverty reduction is still one of several main objectives, and the priorities and inter-linkages will remain both a political and practical issue.

Most recently, the new Centrist coalition Government from October 1997 and its Minister of International Development and Human Rights have expressed an even greater emphasis on the overall aim of poverty reduction.⁹ The Minister confirms the targeting on Least Developed Countries and Africa in particular, and has increased the aid allocation to these countries.

She has particularly singled out the (primary) education and (basic) health sectors as fundamental, and has announced a strong increase in the allocation to these sectors, together with an increased emphasis on private sector development. The importance of agricultural development and food security, which was not mentioned in the first policy statement in May 1998, has later been underlined in the budget proposal of Octo- ber 1998 and in the instructions to NORAD on its 1999 allocations.¹⁰ This Government has reinforced its commitment to the 20/20 Initiative, to the international campaign against child labour, and has launched an international debt relief plan.

The recently announced strategy for support to economic growth in the South puts emphasis on the poorest countries, and underlines the interconnection

between growth in the economic sectors and poverty reduction. According to the strategy, economic growth is crucial for generating income to finance public sector expenditures on health and education, and for generating employment and income opportunities on a sustainable basis especially for the underprivileged groups such as the rural poor and women.¹¹

This Government at the same time maintains and even strengthens the other objectives for Norway’s South policies. The new Minister has Human Rights as part of her portfolio, and has stated that “the promotion of human rights will influence the Government’s policy in all areas, and will be a guiding principle for our policy decisions”¹². Norwegian development aid shall give greater emphasis to human rights, democracy and good governance; to environment issues, in particular management of natural resources in the primary sectors and for alternative energy; and continue the efforts for gender equality as well as in the humanitarian sphere. Special issues of high political priority include child labour, land mines, and HIV/AIDS. The Govern- ment is committed to support peace processes where possible, and contributes to post-conflict reconstruction, rehabilitation and reconciliation.

In summary, policy documents and statements from the present as well as previous governments convey the consistent message that poverty reduction remains the overarching objective. However, at the same time the message tends to be modified by a number of other objectives. These range from support to economic growth and social services to democratic government and good governance, gender equality, conflict resolution and peace, and environmental concerns. One might therefore as well argue that poverty reduction is now one out of five over-arching objectives.

The present Government, as did previous governments, argues that these objectives are closely inter- linked. It is assumed that pursuance of an equitable economic growth; investments in health and education; promotion of democracy, human rights, good governance and civil society; gender equity; responsible management of natural resources and protection of the environment; and promotion of conflict resolution and peace, are all necessary conditions that will (in the long run) contribute to poverty reduction.

8. ibid.

9. See inter alia the following speeches by Hilde Frafjord John- son, Minister of International Development and Human Rights:

“Aid agencies and the fight against poverty: The contribution of the Norwegian Government” (Speech at Overseas Development Institute, London, 19 February 1998), “Statement to the Stort- ing on development cooperation policy”, 5 May 1998, and

“Poverty alleviation, food security and human rights” (Speech at the Agricultural University of Norway, Ås, 8 September 1998).

10. See: St prp nr 1 (1998-99) for budsjetterminen 1999. Uten- riksdepartementet. (The budget proposal for the Ministry of Foreign Affairs for 1999) Oslo: Ministry of Foreign Affairs, 1998, and “Statsbudsjettet 1999 – Tildelingsbrev nr.1/99” Letter from the Minister of International Development and Human Rights to NORAD dated 12 January 1999 (Budget allocation for 1999).

11. Utenriksdepartementet: Strategi for støtte til næringsutvikling i Sør. Oslo: Ministry of Foreign Affairs, 15 February 1999.

(Strategy for support to the economic sectors in the South) 12. Minister of International Development and Human Rights Hilde

Frafjord Johnsen: “The Government’s efforts to promote human rights” Statement to the Storting on Human Rights, 22 January 1998. (Official translation)

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However, Norway will also allocate development aid and promote these objectives per se, where the linkage to poverty reduction is weak or non-existent. For instance, Norway supports the new administration in the Palestine territories (as a kind of “nation-building”), it supports gender awareness campaigns, reduction of industrial pollution, peace efforts, and many other activities because they are seen as promoting one of the main objectives for Norway’s South policies, without any necessary reference or assurance that this will eventually lead to poverty reduction.

In the world of real-politik the prioritisation between the poverty reduction objective and the other development objectives will therefore remain a political decision. The challenge for decision-makers and aid officials is to combine these objectives where possible.

Another approach is to apply the so-called “do-no- harm” principle (developed for use in humanitarian assistance) to ensure that when pursuing one objective, the activity has no negative impact on poverty or the other major objectives.

1.2 Conceptualisation of the poor

The Norwegian Foreign Ministry’s and NORAD’s understanding of poverty is informed by a multi- dimensional concept, but there are no clear definition or analytical approach to poverty and poverty dynamics in the policy documents. The relevant documents as well as views expressed by officials are clearly influenced by the international development debate, as well as by individual and institutional experiences especially from Sub-Sahara Africa and South Asia. In particular the Report to Parliament No.51 (1991-92) relied heavily on the first issues of UNDP’s Human Development Report, and summarised the findings in the World Bank’s World Development Report 1990, which focused on poverty. Additional references are often made to UNICEF’s reports. Report No.51 also carried a special section where social and economic conditions, including the poverty situation, in different regions in the South were briefly reviewed.

In policy documents the first criterion is nevertheless per capita income in the country, which identifies the poor and least developed countries. In these countries it is often assumed that “the majority” are poor. Nor- way has always used per capita income as a basic (but not the only) criterion for selecting priority countries for its aid programmes, and thus also for ‘graduating’

a country like Botswana and terminating the regular aid programme there. Norway refers first to the proportion of aid going to low-income and the least developed countries when illustrating its ‘poverty orientation’. Likewise, the multilateral aid channelled through organisations such as UNDP and the World

Bank’s IDA is partly justified on the basis of their focus on low-income and least developed countries.

Within countries, identification of the poor seems to reflect international or local studies, and references will be made to special groups, as well as special geographical areas. These may be “rural areas”, or

“remote and/or poor districts”, but hardly ever the

“urban slums”. Poor people may be characterised as

“people below the poverty line”, persons without access to basic social services such as education and basic health, or just poor farmers, and sometimes the landless. Women are often mentioned, especially

“poor women”, or “female-headed households”. In some cases there may be “marginalised groups” which could be specific ethnic groups such as the basarwa in Botswana or the ‘scheduled tribes and castes’ in India.

Sometimes, and especially during the 1980s, references were made to ‘the poorest of the poor’, especially in countries where poverty is widespread.

However, there is seldom any analysis of power relations, or differentiation in rural societies. Norway has also singled out special vulnerable groups, such as the physically disabled. More recent attention has been given to child workers. The huge increase in refugees and internally displaced has created an additional cate- gory of extremely poor and vulnerable which has been identified as a prioritised group in Norwegian development aid.

In 1996 the Foreign Ministry published a report on the effectiveness, efficiency, sustainability, relevance and impact of Norwegian Development Aid based on a review of evaluation studies completed between 1986 and 1992.¹³ This also included the experiences and lessons from interventions to reduce poverty and improve living conditions for the very poor. The study concluded that even when the evaluations found positive impact, such as some rural development programmes, some health and child-related projects, and the Norwegian Volunteer Service, hardly any of these reports did actually demonstrate that poverty was reduced as a result of the aid effort. Often it was found that the development activities described had rather loose links to the poorest population groups. The poor were seldom precisely identified during the planning of projects and programmes.

If Norway wants to develop a more coherent aid strategy for poverty reduction, it will be necessary to make better use of available poverty studies and analyses.

The understanding of poverty, its causes and dynamics are much better today that it has ever been before.

Despite many and major shortcomings and gaps, the

13. Chr. Michelsen Institute: Norwegian Development Aid Experi- ences. A Review of Evaluation Studies 1986-92, Oslo: Ministry of Foreign Affairs 1996 (Evaluation Report 2.96)

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available data on living conditions and the analysis of poverty provide governments in the South and donors with a much better basis for planning their external assistance and interventions than ever before. This has also included “new issues” in the scholarly poverty debate such as social exclusion and social capital, vio- lence and war, and others. Where these studies do not yet exist, Norway may wish to initiate together with other development partners, the necessary data gather- ing and analysis at the relevant national or local level.

It may also be necessary to clarify the objective of

“poverty reduction” especially whether it is aimed at the broader poverty problems, or focusing more narrowly at improving the conditions for those in extreme poverty – also termed “the poorest of the poor”. As mentioned above, the OECD/DAC Strategy is unclear at this point. Focusing more narrowly on the extreme poor may require a different approach than reducing the general extent of poverty. Depending on the cir- cumstances this may also be more difficult, and per- haps more politically sensitive, – and often impossible without also approaching the broader poverty context.

1.3 The Norwegian approach to poverty reduction

While there is not one clearly expressed strategy or approach to development and poverty reduction in the Norwegian aid policy documents, we would argue that they nevertheless convey a basic consensus, which is also reflected in the views of the aid officials at present. There is a general understanding that poverty is a complex phenomenon that has been caused and reinforced by a number of factors; economic, political, social, cultural, historical, internal and external. The present emphasis is on internal economic and political factors. There is therefore a need for a multi-pronged approach, making use of a combination of approaches.

One reason for this seems to be derived from Nor- way’s own experiences in reducing poverty at home;

poverty reduction can best be achieved through a broad set of policy interventions focusing as much on general conditions and creating an enabling environment for development as on specific targeted interventions.

The dominant view underlines the basic role of the Government and state institutions in creating the necessary conditions for poverty reduction, by providing social services, investing in basic social and economic infrastructure, and redistribute wealth and incomes.

The state is the only viable institution that represents the whole population, and can ensure global coverage.

Norway believes in supporting an activist developmental state, which will encourage and stimulate the

economy, and use planning and incentives to promote an equitable economic development. Norway no longer supports a nationalised state-controlled economy. This pre-eminent role of the state has been re- emphasised in recent years, through the policies of

‘mainstreaming’ development concerns, and ‘recipient responsibility’.

Norway has always strongly underlined the importance of ‘investing in people’, building ‘human capital’, and developing the human resources, also – and particularly – among the poor. This is implemented through the social sectors, especially health and education. Norway has previously put more emphasis on higher and more specialised education, assuming that primary education can be – and should be – the responsibility of the developing countries themselves.

Family planning was previously singled out as a priority in Norway’s aid package, but it is now integrated into the health sector. In recent years the importance of primary education and basic health has become even more emphasised, and Norway has given strong support to the “20-20 initiative” since the 1995 Social Summit.

Norway has always believed in the importance of economic growth as a prerequisite for sustainable poverty reduction. There is however a shift in emphasis from investing in physical infrastructure (such as hydropower, roads, coastal shipping and river transport, and telecommunication) which assumed that economic investments and growth would follow, towards more direct support to the ‘productive sectors’. There is also a shift from supporting state-owned industry, towards encouraging the private sector. Norway has never believed in the simple ‘trickle-down’ theory that economic growth would more-or-less automatically also reach and benefit the poor. Rather, Norway believes in the need to regulate, plan and manage the economy in order to promote a more balanced and equitable growth. In order to promote a ‘pro-poor’ economy, Norway has often supported integrated rural (district) development programmes. More emphasis has recently been given to small and medium enterprises, micro-enterprises (to be supported by micro-credits), and lately re-emphasising the role of agriculture.

Norway has also argued for the need to supplement the Government’s general policies with more targeted projects often through non-governmental organisations, especially where the state does not perform, or has insufficient capacity. This reflects a more critical approach towards the state, and the belief that NGOs can be more flexible, and reach the poor more directly and efficiently. This view was more prominent in the 1980s, but is still maintained to some extent.

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There has been an increasing emphasis on empowerment of the poor, through self-organisations and local participation, as well as on creating opportunities and conditions for a more open, democratic, pluralistic society. This is seen as important conditions for changing power relations, giving the poor a greater influence on their own living conditions. This view thus reflects a change from the previous greater acceptance of the one-party state, which was regarded as an important uniting force for nation-building. However, Norway has only to a limited extent been involved in support to larger popular movements and interest groups such as national farmers associations, trade unions or the co- operative movement which all played a crucial role in promoting equity, power-sharing, and combating poverty in the Nordic countries.

Norway has accepted and incorporated many of the arguments of the women’s movement, that the majority of the poor are women and that a gender focus is central in poverty reduction policies.

Social safety nets have not been a prominent feature of Norwegian thinking, in terms of providing social welfare transfers and direct cash support to the poor, except in emergency situations of natural disasters or for refugees and displaced. This is generally considered too costly for poor countries.

The international economic system has also been held responsible for keeping countries, and their population, in poverty. Especially during the 1970s Norway

expressed partial agreement with the ‘dependency’

theory, and gave general support to the demands for a New International Economic Order. Norway was arguing that the poor developing countries were losing out in international trade, and that they were dominated by the multinational companies, which did not benefit these countries. These views have now changed, however, and Norway is more in favour of the benefits from international trade as well as international investments also for developing countries. Norway will nevertheless maintain its support to more moderate reforms in the international economic system. At present, Norway is arguing strongly for debt relief, claiming that the debt burden (and some of the conditions in the structural adjustment packages) is hamper- ing poverty reduction efforts.

Better environmental policies have also been added and formulated so that they will improve conditions of living for the poor, especially when focusing on land use and soil conservation, better management of forest resources, management of fish resources and coastal zones, etc. Better sanitation and reduction of health hazards for the urban slum dwellers are mentioned as equally relevant.

Finally, Norway is arguing that reducing tension and solving conflicts is crucial for avoiding the disastrous outcomes of internal violent conflicts and wars, which have created large-scale poverty in many countries.

Within the bilateral aid channel the most important avenue is support to the country’s own efforts to reduce poverty. Norway has a strong commitment to partnership with recipient countries and emphasises the need to ensure recipient ownership of policies, programmes and projects. This has led to a focus on policy dialogue between Norway and recipients as the channel for promoting major Norwegian issues and concerns. This has led to a reinforcement of the need

for co-ordination of donors to ensure that key concerns are communicated and listened to, as well as for a new emphasis on co-ordination at the sector level, through e.g. sector-wide initiatives.

NORAD and the Ministry make use of several channels and mechanisms to promote the various elements of a poverty reduction policy, including the regular government-to-government programme, the special The Norwegian approach to poverty reduction can thus in our interpretation be summed up by the

following nine main policy elements:

• A developmental state, with an active role for the Government and state institutions

• Investing in people, through (basic) education and (basic) health

• A balanced and equitable economic growth, with a managed mixed economy

• Targeted interventions and projects to supplement general Government policies

• Empowerment of the poor and an open, democratic and pluralistic society

• Equal participation, opportunities and rights for women

• Reforms in the international economic system and debt relief

• Protection of the environment and resource management for the benefit of the poor

• Conflict resolution, conflict prevention and post-conflict reconciliation

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allocations for promoting gender, environmental concerns, democracy and human rights, the allocations to support non-governmental organisations, and the special allocations for commercial cooperation.¹⁴

Within the regular country programme, NORAD finds that assistance in the social sectors for health and education and those targeted on women and children, together with support to rural development efforts, are the most relevant for direct poverty reduction. While many other programmes can also be made relevant, NORAD often finds it much more difficult to see how support for heavy infrastructure such as hydropower and telecommunication, or oil development can be made directly poverty oriented.

NORAD shall implement Norway’s aid programme in the selected partner countries based on approved Nor- wegian development objectives, policy decisions and guidelines. This poses special challenges and dilemmas in situations where partner governments have different priorities, and do not share Norway’s views on how to achieve poverty reduction in the short run.

These challenges have become more complicated with the parallel emphasis on recipient orientation, local ownership and donor co-ordination. Norway has so far paid little attention to how the policy dialogue can be conducted at the national and sectoral levels under such conditions.

The overall aim of NORAD’s allocation to non-governmental organisations is to help ensure that fundamental social and economic services reach poor and vulnerable groups. According to NORAD, emphasis is placed on efforts to strengthen local partner organisations in the South, thereby promoting development of civil society. The support to NGOs is therefore regarded as strongly focused on poverty reduction.

However, also the special allocation for commercial co-operation and support to private commercial enterprises, are regarded by NORAD as a means to promote poverty reduction. Increased viable economic production will create direct and indirect employment and generate incomes for those employed as well as for the Government through taxation, all of which are considered crucial for poverty reduction. When scrutinising applications from the private sector for support, NORAD pays particular attention to the employment effects, especially on women, and whether the project is financially and commercially viable so at to contribute to a sustainable income. NORAD has not directed these projects into special branches or geographic locations, although Africa has a priority, as long as the

main conditions are satisfied. The new strategy for support to economic sectors, which was announced in February 1999, underlines further these linkages between commercial co-operation and contributions to poverty reduction

The Norwegian Volunteer Service (NVS) has also tra- ditionally been seen as an important vehicle for providing assistance directly to poor and vulnerable groups. Many volunteers worked directly in the vil- lages, in local schools and local organisations and supported small-scale local projects. They were also seen as important sources of information on the situation and needs at the grassroots level, for the rest of the Norwegian aid apparatus. In the heydays of the targeted aid projects in the 1970s and earlier 1980s, the NVS was used actively, often for activities that the central Government did not wish to support otherwise.

However, it has been found that many of the efforts of the volunteers were not sustainable, and had only limited long term impact. It has therefore been decided that the present organisation of the Volunteer Service will be terminated at the end of 1999, and discussions have started on what might become the “new NVS”.

In section 3 below we review Norway’s operationalisation of its poverty reduction policies in two major partner countries, Bangladesh and Tanzania.

1.4 The multilateral channel

Norway has always placed great emphasis on working through multilateral institutions. A significant portion of Norwegian development assistance has always been channelled through such institutions, primarily UN agencies, the World Bank and the regional development banks. At present close to 30 per cent of the total aid is allocated as core funding to these multilateral agencies, while another 14 to 15 per cent is channelled as so-called multi-bi projects, through various trust funds, co-financing, debt relief operations or humanitarian assistance through the multilaterals. Cf. also Tables 1 and 2. While the primary mechanism for indi- cating Norway’s priorities is through the allocation of core funding, Norway has consistently tried to pursue certain key issues through an active participation in the governing bodies of such institutions, often combined with the use of earmarked funding to promote prioritised issues. As expressed by one aid official in the Ministry of Foreign Affairs, “Norway allocates its financial contributions to those UN agencies that have a poverty focus, and then makes an effort to make these agencies even more poverty focused”.

14. The special allocations for environment, women and cultural activities will be discontinued as from year 2000, and fully integrated into the regular aid programmes.

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Table 1

Official Norwegian development aid (incl. humanitarian aid), by main channel of assistance, 1995-1997

Source: The data in this and all other tables in this paper are derived from NORAD’s Norsk bistand i tall for 1997 (Oslo:

NORAD, May 1998)

Basic social services and poverty reduction have emerged as major issues pursued by Norway through these institutions, in addition to gender and environmental issues. This became particularly evident in the aftermath of the introduction in the early 1980s of the World Bank/IMF-initiated economic reform programmes – the structural adjustment programmes – in Africa. While not directly opposing these programmes in the Bank’s governing bodies, Norway took a very critical position in many of the countries concerned. In the second half the 1980s, Norway together with other member countries began to argue for “adjustment with

a human face”. This implied a strong focus on the impact on poverty, calls for special support to vulnerable groups and protection of the social sectors from cuts in public spending. Norway has participated actively in the work on the Social Dimensions of Adjustment (SDA). It also played an important role in establishing a Poverty and Social Policy Working Group under the World Bank’s Special Programme for Africa. In 1997 it was decided to focus this working group better, and Norway’s proposal to establish an ad hoc group on gender issues was also approved.

1995 1996 1997

NOK mill. % NOK mill. % NOK mill. %

Bilateral aid 4,221.3 53.3 4,483.4 52.8 4,798.6 51.8

Multi-bilateral aid¹ 1,250.9 15.8 1,281.1 15.1 1,316.5 14.2

Multilateral aid 2,137.3 27.0 2,368.5 27.9 2,760.0 29.8

Total contrib. to multilateral org. 3,388.2 42.8 3,649.6 43.0 4,076.5 44.0

Administration 314.1 4.0 359.0 4.2 386,1 4.2

Gross development aid 7,923.6 100.0 8,492.1 100.0 9,261.2 100.0

Loan instalments 21.4 19.2 20.1

Net development aid 7,902.2 8,472.8 9,241.1

Net aid as % of GNP 0.87 0.85 0.86

1. Multi-bilateral aid is defined as earmarked support for projects administered by multilateral organisations.

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Table 2

Aid channelled through multilateral and international organisations 1997 (1000 NOK)

Multilateral aid¹ Multi-bi. aid² Total Per cent 1. UNDP and UNDP-administered funds

Subtotal 564,000 164,852 728,852 17.9

2. Development banks and affiliated development funds

World Bank (IBRD/IDA) 566.325 228,190 794,515

Others 421,684 200,773 622,457

Subtotal 988,009 428,963 1,416,972 34.8

3. Organisations for development of agriculture, fisheries and food aid

WFP/CGIAR/FAO 255,522 92,959 348,481

Subtotal 255,522 92,959 348,481 8.5

4. Organisations for children, population issues and health

UNICEF 271,000 184,262 455,262

UNFPA 200,000 50,561 250,561

WHO 120,663 20,123 140,786

Others 48,879 5,990 54,869

Subtotal 640,542 260,936 901,478 22.1

5. Other UN organisations

Subtotal 30,332 158,573 188,905 4.6

6. UN environmental fund

Global environmental facility (GEF) 46,550 46,550

Subtotal 46,550 46,550 1.1

Total, without humanitarian assistance 2,524,955 1,106,283 3,631,238 89.1 7. International humanitarian aid and

assistance for refugees

UNHCR 150,000 106,191 256,191

UNRWA 85,000 16,011 101,011

Others 87,993 87,993

Subtotal 235,000 210,195 445,195 10.9

Total aid via multilateral org. 2,759,955 1,316,478 4,076,433 100.0

1. Multilateral aid is defined as general grants to multilateral organisations.

2. Multi-bi aid is defined as earmarked support to projects administered by multilateral organisations.

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At the more general level, Norway participates through the Nordic-Baltic Executive Director’s Office in all discussions at Board meetings, with a view to make the World Bank more effective in its poverty reduction policy, where a major focus now is on operationalisation. Norway will pay particular attention to how the new World Bank Country Assistance Strate- gies integrate and operationalise both poverty and gender issues. This active participation in the World Bank is considered of great overall importance for Norway, and it also gives Norway an opportunity to contribute to the more overall perspectives, beyond what can be achieved by individual projects and programmes.

Within the UN agencies, Norway gives highest priority to poverty focused agencies such as UNDP and UNICEF, and has been involved in the reform processes in both of these agencies to make them more effective in implementing their mandates.

In recent years, Norway has played an active role in promoting the 20/20 concept, which was supported (but not formally agreed upon) by the Social Summit in 1995. This concept encourages all donors as well as all recipient countries to allocate at least 20 per cent of their budgets respectively, to basic social services.

Norway and the Netherlands have taken the responsibility for promoting this concept further, and are col- laborating closely with UNDP, UNICEF, UNFPA and the World Bank for this purpose. Interestingly, Nor- way may not yet have achieved this target of 20 per cent to basic social services in its own aid budget, but the available statistics do not allow for an accurate estimate. The recent policy decision by the new Minis- ter to aim for at least 10 per cent of the aid budget to education, and another 10 per cent to the health sector may be seen as an effort towards this target. But given the actual definition of ‘basic social services’ this will not automatically be achieved.

1.5 Spending and poverty reduction

Norway provides no statistics or figures specifically on the poverty focus of the aid disbursements. Statis- tics are however available on different sectoral allocations for bilateral aid. These figures are presented in Table 3. Beginning in 1997 NORAD has also prepared statistics on allocation for basic social services. Fig- ures for 1994-1997 are now available (Table 4) as well as figures for 1997 allocation to the various sub-sectors of basic social services (Table 5).

The statistical data also provide actual allocation by country and region.¹⁵ They show that in recent years (1995-97) less than 30 per cent of the bilateral aid has been allocated to the Least Developed Countries. The highest priority countries (previously termed “programme countries”) received only 35 per cent of total bilateral aid, while almost two thirds went to other countries and unspecified. During these years Bosnia- Herzegovina, the Palestinian Administrative Areas, and South Africa have been among the top recipients of Norwegian bilateral assistance. In the budget for 1999, the allocation for refugees and asylum seekers in Norway is larger than for any one other priority country receiving bilateral ODA.

While Table 3 provides information on sectoral distribution of the bilateral aid, this does not tell us anything about how these activities were contributing to poverty reduction directly or indirectly. According to the Nor- wegian approach to poverty reduction, practically all of these sectors may have a positive impact on poverty, through employment and income generation, provision of basic facilities and services including education, health, drinking water supply and rural electrification, or strengthening local organisations and democratisation.

15. See also NORAD: Annual report 1997. Oslo, 1998 and St prp nr 1 (1998-99) for budsjetterminen 1999. Utenriksdepartemen- tet. (The budget proposal for the Ministry of Foreign Affairs for 1999) Oslo: Ministry of Foreign Affairs, 1998.

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Table 3

Sectoral allocation of total bilateral aid 1995-1997¹

1. The table shows all bilateral aid, including multi-bilateral aid.

1995 1996 1997

NOK mill. % NOK mill. % NOK mill. %

Economic activity

Agriculture and fisheries 423.6 7.8 366.3 6.4 406.1 6.7

Industry, oil,

mining and handcrafts

186.3 3.4 203.4 3.5 153.5 2.5

Banking, finance, trade and tourism

100.0 1.8 111.5 1.9 173.7 2.9

Rural development 214.4 3.9 202.7 3.5 182.6 3.0

Subtotal 924.3 17.0 883.9 15.4 915.9 15.0

Infrastructure Water, power supply,

transport and communications

871.0 16.0 1,050.2 18.3 1,036.1 17.0

Subtotal 871.0 16.0 1,050.2 18.3 1,036.1 17.0

Health, education and social measures

Health & family planning 538.3 9.9 536.0 9.3 580.1 9.5

Education (non-vocational) 379.4 7.0 484.5 8.4 571.6 9.4

Social infrastructure 310.5 5.7 350.6 6.1 427.2 7.0

Subtotal 1,228.2 22.5 1,371.1 23.9 1,578.9 25.9

Public sector management, democracy, peace and human rights

Public admin. and planning 141.4 2.6 121.3 2.1 152.9 2.5

Democracy, peace and human rights

521.0 9.6 499.3 8.7 573.4 9.4

Subtotal 662.4 12.2 620.6 10.8 726.3 11.9

Emergency relief

Humanitarian relief work 876.4 16.1 724.3 12.6 782.3 12.8

Emergency food aid 97.4 1.8 113.4 2.0 162.7 2.7

Subtotal 973.8 17.9 837.7 14.6 945.0 15.5

Not specified per sector

Measures for women 55.6 1.0 55.2 1.0 66.4 1.1

Environmental protection 178.8 3.3 225.3 3.9 273.6 4.5

Import support / debt relief

304.3 5.6 332.2 5.8 304.2 5.0

Other 252.5 4.6 369.1 6.4 248.6 4.1

Subtotal 791.2 14.5 981.8 17.1 892.8 14.6

Total 5,450.8 100.0 5,745.3 100.0 6,095.0 100.0

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However, both the present and previous governments pay a high attention to the social sectors and basic social services. Table 3 shows that the allocation to the social sectors has increased from 22.5 (in 1995) to 26 per cent (in 1997) of bilateral aid. But Table 4 shows

that in 1997 the actual allocation to basic social services was only 15 per cent, and therefore considerably below the 20 per cent objective, according to the “20/

20-concept”.

Table 4

Support to basic social services in various regions as a proportion of total bilateral assistance, 1994 and 1997

Table 5

Support to basic social services in bilateral aid: regions and sectors 1997

All sectors Basic social services

1994 1997 1994 1997

1000 NOK 1000 NOK 1000 NOK % 1000 NOK %

Africa 2,670,100 2,942,970 353,136 13.2 509,118 17.3

Asia 1,202,900 1,573,720 157,498 13.1 235,270 14.9

Latin America 390,100 500,077 42,305 10.8 80,023 16.0

Other n.a. 1,077,527 93,219 n.a. 87,858 8.2

Total - 6,094,994 646,158 - 912,269 15.0

Primary health

Primary educ.

Water prov.

Nutrition Social institutions

Rural development

Other¹ Total

1000 NOK 1000 NOK

1000 NOK

Africa 262,313 106,142 45,826 0 16,646 33,178 45,013 509,118

Asia 66,681 69,458 30,927 1,232 4,626 18,142 44,204 235,270

Latin America 28,352 12,239 4,633 50 5,412 12,354 16,983 80,023

Europe 1,840 3,500 - - 13,491 - 1,866 20,697

Oceania - - - - 935 - - 935

Global &

unspecified

57,153 1,420 7,000 - - 127 526 66,226

Total 414,499 189,259 88,386 1,282 27,619 63,801 106,726 912,269

Percentage 45% 21% 10% 0% 3% 7% 12% 100%

1. Includes other social sector, projects directed at women and multi-sector projects.

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As noted above, the present Government has announced increased allocations to basic social services. Table 5 shows that primary health care received almost half of the 1997 allocation to basic social services. Education is now a top priority area and in most of Norway’s main partner countries major education programmes are established or planned.

If Norway is to continue its broad and multi-sectoral approach to poverty reduction, it will be necessary, however, to pay equal attention to how the aid programmes in the other sectors can effectively contribute to poverty reduction, rather than concentrating narrowly on the basic social services.

Policies and Strategies for Poverty Reduction in Norwegian Development Aid